Thoughts on

European Markets

“Growth In The (Earthmoving equipment) market peaked in October 2004, and dropped dramatically afterwards. However, it's still at around +5% per year, and the volume is still increasing. Growth in French sales peaked-out at the beginning of last year, and it was the same for Italy, Germany, and the UK. The exception is Spain, which is still growing. It looked like it might have peaked in early summer last year, but that was just because of the July and August vacation period - no-one buys machines then. It has come back strongly since the summer.

“Europe's growth rate is slowing down, but its still around +3% to +5%, which is good when you think about the GDP growth figure for this region. At the moment there is no correlation between factors like construction growth and GDP growth, and equipment sales.

“Sales growth in utility equipment (under about 10 tonnes operating weight) still hasn't peaked, and it continues to grow steeply. Utility equipment sales are very cyclical, and growth was down in the third quarter of the year, but I think it will pick up again. France and Italy have slowed down, but Germany, Spain and the UK are showing growth.”

Komatsu Market Share

“Our market share for larger equipment began to grow again in late 2004, in all products, and that is continuing. Our market share in utility equipment is stable. The growth in that market has been such that we haven't been able to capture more market share - we simply couldn't produce enough machines to grow our share.”

Win Some, Lose Some

“From the end of 2004, our dozer market share has been increasing, and now it's around 40% in Europe - we're edging out Caterpillar. Our market share is also growing in rigid dump trucks, and I think one factor is that our lead times for these products have stayed short. European customers for big equipment generally don't change suppliers, but if they have to wait 12 months or more from their normal manufacturer, but we can supply them in four to six months, they'll go with us. We have good products of course, so we may well keep them.

“Six to 12 tonne midi crawler excavators were an area where we used to be number one, but now we are second or third. Competition has increased a lot there - it used to be just us and Caterpillar, but now everyone makes machines in this class, particularly companies like Takeuchi that used to just make compact equipment.”

World Markets

“North America is clearly slowing down. We anticipate that growth will stop in the next three and six months. We're seeing the signs already. The housing market is slowing, and the level of borrowing is very high.

“Japan is stable, and has been bouncing back recently. We think there will be steady growth in the next few years, now that the economy is restructured and the problems in the banking sector are in the past.

“China is not easy to predict. One month the market might take 6000 units, others it might be 2000. It's certainly a seasonal market and people buy in January, February and March. We expect to see that again this year.”